Touchstone Law Group LLP – Kelowna Lawyers

Keeping your company’s records in order is a critical part of managing your business effectively. In accordance with the Business Corporations Act in British Columbia and the Articles of Incorporation, there are several key tasks that must be completed annually to stay compliant. These include filing the annual report, adopting annual resolutions (unless an annual meeting is held), and ensuring your corporate records book is up to date. We assist numerous companies with maintaining well-organized, up-to-date record books to ensure they meet these requirements.

Neglecting these tasks can lead to a range of problems. For example: (a) if annual reports aren’t filed for two consecutive years, your company risks being struck from the corporate registry; (b) if your company is seeking financing, the bank may require current documentation or a solicitor’s opinion letter to verify the company’s status; and (c) if a prospective buyer is conducting due diligence, they will want to ensure that all corporate matters are in good standing and properly documented. Addressing these issues under pressure can be far more time-consuming, expensive, and stressful than keeping everything up to date as it becomes due.

If you have any questions regarding your company’s compliance or record-keeping, don’t hesitate to reach out. We’re here to help you navigate your specific needs and keep your business on track.

This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250)-448-2637 or by email to info@touchstone.law

Are you considering purchasing a foreclosure? It’s essential to approach foreclosure purchases with caution, as there are significant legal implications that could catch the unprepared buyer off guard. Unlike traditional home purchases, where buyers typically receive a property disclosure statement outlining the condition of the home, lenders or vendors who have foreclosed on a property are often unwilling to make any such representations. This means you may be purchasing the property “as is,” without any guarantees regarding its state.

After submitting an offer and having it accepted, some buyers may be surprised to discover that the previous owners of the property, who have been part of the foreclosure proceedings, are still living in the home. Even though the sale is scheduled to proceed, the buyers may find themselves waiting days or even weeks for the lender/vendor to remove the previous occupants. This is because the standard foreclosure contract allows the lender or vendor a reasonable amount of time to legally remove the former owners, which can delay the possession date.

Furthermore, the purchase agreements for foreclosed properties typically state that buyers will take the property “as is, where is” on the possession date. This means that the lender or vendor is not obligated to deliver the home in the condition it was in when the buyer first viewed it. Buyers should not assume that any fixtures, appliances, or items in the home will remain, nor can they expect the lender to maintain or improve the property before they take possession. This lack of assurance can pose unexpected challenges, as the home may have been poorly maintained or stripped of valuable items.

The above points are just a few examples of the risks and liabilities that can arise when purchasing a foreclosure. While this is not meant to deter you from considering a foreclosed property—many buyers successfully acquire great deals—it’s important to be aware of the unique challenges involved. If you’re thinking about buying a foreclosure, or if you have any specific questions about the process, please don’t hesitate to contact us. We’d be happy to discuss your needs and provide guidance tailored to your situation.

When deciding whether to incorporate a business or continue operating as a sole proprietorship, there are both accounting and legal factors to consider, each with significant implications. From an accounting perspective, one key advantage of incorporation is the ability to split income between family members. By making them shareholders in the company, you can distribute dividends, which can help reduce overall tax liabilities, especially in higher income brackets. This flexibility in income distribution is a compelling reason for many business owners to explore incorporation as a strategy for tax efficiency and wealth management.

On the legal side, incorporating a business offers crucial protection against personal liability. As the business grows, the risk of financial or legal troubles increases, and incorporating can help shield your personal assets from business debts and legal claims. However, there are certain situations in which a director or officer of a corporation can still be held personally liable. For instance, liability may arise if a director personally guarantees a contract or enters into an agreement in their own name, rather than on behalf of the company. Additionally, directors have some limited liability in cases involving unpaid wages, unremitted source deductions, or failure to meet other statutory obligations, such as acting in the best interests of the company or performing duties with the requisite level of care, diligence, and skill. These legal responsibilities can be complex, and it is essential to understand the potential risks.

Given the intricacies of both the financial and legal considerations, it’s vital to seek advice from both an accountant and a lawyer before making the decision to incorporate. Their expertise will help you evaluate whether incorporation is the right move for your business, based on your specific goals, financial situation, and risk tolerance.

Creating a will serves many important purposes, with the primary one being to ensure that your assets are passed on to the family members and friends you choose. However, this is just the beginning. A will provides you with the opportunity to appoint an executor—someone you trust to take charge of your estate, manage your assets, and ensure that any outstanding debts are settled. Without an appointed executor, your loved ones may be forced to go to court in order to have someone named as the administrator of your estate. This process can be time-consuming, costly, and cause unnecessary delays in settling your affairs.

In addition to managing your assets, a will also allows you to make provisions for your minor children. By designating guardians in your will, you ensure that your children will be cared for by the individuals you trust most. If you don’t name a guardian, however, there is a chance that the Public Guardian may be appointed—whether or not that aligns with your wishes. This is a crucial decision to make, as it can significantly impact your children’s future well-being.

A will also lets you specify your final wishes regarding burial or cremation, sparing your loved ones the added stress of making those decisions during a difficult time. Without clear instructions, your family may be left to guess what you would have wanted, potentially causing confusion and conflict.

In summary, regardless of your financial standing, having a will in place is an essential aspect of good planning. While there are costs involved in drafting and executing a valid will, the investment is relatively small when compared to the potential financial and emotional strain your family may experience if you pass away without one. A well-crafted will provides clarity, reduces the burden on your loved ones, and ensures your wishes are respected.

You come and go, you come and go.

When purchasing commercial real estate that is tenant-occupied, particularly if the new owner intends to take over the existing leases, there are several key considerations a prospective buyer should address. One of the first steps is to obtain and review copies of the existing leases with the assistance of legal counsel. This ensures that the purchaser is fully aware of any unique clauses or provisions within the leases that could affect their use and enjoyment of the property.

The buyer must also ensure that tenants are notified about the change of ownership and provided with clear instructions on where and to whom rent payments should be made after the closing date. If this notification is not given, tenants may continue paying rent to the previous landlord without facing liability. If the vendor is responsible for issuing the notice, the purchaser should request a copy of the notice and verify that it has been delivered to all tenants before or at the time of closing.

In addition to the standard closing documents involved in a commercial real estate transaction, the purchaser should request that the vendor provide estoppel certificates (or “tenant acknowledgments”) signed by the tenants. These certificates offer important information, including:

The amount of rent being paid, including both base rent and additional charges.
The square footage of the leased premises.
Confirmation of the lease type.
A statement confirming no changes have been made to the lease terms.
Information on any deposits or prepaid amounts held by the landlord.
Confirmation that there have been no breaches by the landlord under the lease.

It’s essential for the purchaser’s offer to include a requirement for the vendor to provide these estoppel certificates. Ideally, the form of the estoppel certificate should be negotiated in advance and included as part of the purchase and sale agreement. In some instances, the lender may also require copies of these certificates, so it’s wise to consult with the lender early to understand any specific requirements they may have.

When purchasing a home, the only reliable way to establish the property’s lot boundaries and the location of any improvements is through a current survey certificate provided by a qualified surveyor. While the plan filed with the Land Title Office can be helpful, it is not definitive. The Land Title Office does not certify that these plans accurately reflect the boundaries and dimensions of the property.

A survey certificate typically outlines the lot boundaries, the locations of improvements, and may also indicate any registered rights of way or easements. This document is crucial for determining whether any structures on the property encroach on neighboring land, or if adjacent properties have improvements that infringe on your land. While the cost of obtaining a survey may vary, it is a relatively small investment to confirm the precise boundaries and location of improvements on what is likely one of the largest financial commitments most people will ever make.

In some cases, the seller may already have a survey certificate. Depending on the age of the certificate and whether any changes have been made to the property or its improvements, the buyer might find the seller’s survey acceptable. Often, the seller will provide a statutory declaration confirming that, to the best of their knowledge, the survey remains accurate and no alterations have been made to the property since it was last surveyed. While this is not as reliable as a current survey certificate, it can offer some peace of mind if the buyer chooses not to commission a new survey.

For buyers obtaining a mortgage, lenders typically require a survey certificate as part of the loan process. However, many lenders may accept a title insurance policy instead. Title insurance can protect the lender from various potential issues related to the property, such as encroachments or past title defects. Buyers also have the option to purchase a homeowner’s policy, which offers similar protections for them. Even with title insurance in place, it’s worth considering whether to obtain a survey certificate if one is not already available, as it provides additional assurance regarding the property’s boundaries and condition.

It’s Friday night, you’ve uncorked a bottle of the Okanagan’s finest Syrah, and as you sip, your mind wanders into deeper territory. Suddenly, a thought hits: “I don’t have a will!” In a burst of inspiration, you grab the nearest napkin and start jotting down your final wishes.

The Wills, Estate and Succession Act of British Columbia outlines the formal criteria needed to create a valid will:

The will must be in writing (you’ve got that covered!);
The will must be signed at its end by the will-maker (or by another person in the will-maker’s presence and by the will-maker’s direction);
The will-maker must make or acknowledge the signature in the presence of two or more witnesses who are both present at the time;
Two or more witnesses of the witnessed must sign the will in the presence of the will-maker (there are exceptions for members of the armed forces on active service); and
The will-maker must be at least 16 years old (unless a member of the armed forces on active service).

In the simplest sense, if your napkin Will covers those bases, it is valid. Naturally, like everything else in life, things aren’t quite so simple; that’s why you have us!

As part of the Law Society of British Columbia requirements, law firms are required to retain certain records for all funds deposited to the law firm’s trust account which is often a pooled trust account including funds for multiple clients.

Electronic deposits into a law firm’s trust account are permissible, so long as the lawyer obtains written confirmation, either from the financial institution or remitter including the details required for compliance. Proof of the deposit is required, such as a deposit receipt, for funds transferred from account to account by a banking institution on behalf of a client. In the event a client deposits a bank draft made payable to the law firm in trust into the trust account, then a deposit receipt is required as well as a copy of the bank draft to verify the type of funds deposited. Wire transfers are also acceptable provided a satisfactory record of the wire transfer initiation is received and retained by the law firm.

All funds deposited must be confirmed with appropriate back up for audit purposes and must be retained by the law firm as part of their accounting procedures.

Una Kuzio: una@touchstone.law

Elizabeth Ford: elizabeth@touchstone.law

Jane Otterstrom: jane@touchstone.law

As we approach the March 31 deadline for the December 31, 2024 declarations required to be made under the Speculation and Vacancy Tax Act in British Columbia (the “Act”), we wish to remind you to consider what, if any, steps you are required to take with respect to property owned by you, whether personally or through a corporation or trust. It is important to remember that the filing requirement will apply to the party who was the registered owner of the property as of December 31, 2024 so transfers of the property close to that date will need to be carefully considered as to who is to complete the filing. A transfer filed at the Land Title Office may take several days or weeks to be processed to reflect the new owners and, during that time, the “seller” of the property would remain as the registered owner, subject to the pending transfer.

If you have not already, you should receive a declaration letter in the mail before the end of February, 2025 that will include your Letter ID and your Declaration Code. You will need both of those to complete the declaration. Be aware, that the letter is typically sent to your address as it shows on title to your property so if that address is not current, it is possible you may not receive your letter. That, however, does not remove the obligation to complete the filing so you are responsible to ensure you meet the filing and payment requirements regardless.

New for the filing due by March 30, 2025 is the addition of 13 new communities to those that the Act applies to including, but not limited to, Vernon, Coldstream, Kamloops, Penticton, Summerland, Peachland and Lake Country. Please be sure to check if your property is now included, even if it was not previously subject to the Act and, if in doubt, ensure you seek confirmation or clarification!

More information can be found here: Speculation and vacancy tax – Province of British Columbia

Una Kuzio: una@touchstone.law

Elizabeth Ford: elizabeth@touchstone.law

January 1, 2025 means the launch of the new “anti-flipping tax rule” in British Columbia applicable under the Residential Property (Short-Term Holding) Profit Tax Act (the “Act”). Generally speaking, the new Act will serve to tax property owners who sell a property with less than two years of ownership (there are various situations that are considered a sale including the transfer of a beneficial interest in a property for consideration in money or kind).

While there are certain exemptions, having knowledge of the exemptions and requirements to obtain the exemption will be important as some are automatically exempt while others need to be declared on a return.

Where taxable, the profits made on the sale will be subject to a tax up to 20% of the profits made and the tax may be applicable, regardless of when the property was acquired (i.e. it does not apply just to properties acquired after January 1, 2025).

The BC system is separate and distinct from the federal tax requirements so property owners are well advised to discuss potential property sales with their accounting professionals early to ensure they are aware of the totality of the tax implications. As well, specific filing timelines apply so it’s key that (the return must be filed within 90 days of the sale of the property)

More details can be found here: BC home flipping tax – Province of British Columbia

Elizabeth Ford: elizabeth@touchstone.law

Una Kuzio: una@touchstone.law

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